The United Kingdom's withdrawal from the European Union is an event of great importance for the people of the United Kingdom, a fundamental change in the framework of relations between States in the European continent, and the only outcome that guarantees respect for the sovereign will of the British people, expressed in the 2016 referendum.

This important event is inseparable from, and simultaneously an expression of, the contradictions and deep crisis of the European capitalist integration, which increasingly reveals itself in conflict with the peoples' interests and aspirations, increasingly exhausted and incapable of answering the economic, social and political problems affecting various countries in the European continent.

The UK's withdrawal from the European Union represents a serious setback to the theories of inevitability and irreversibility of the European Union; a defeat for all those who tried – through unacceptable pressures, blackmail and maneuvering, in both the European Union and the United Kingdom– to counter the sovereign decision of the British people.

PCP expresses doubts, disagreements and concerns about the terms of the UK Withdrawal Agreement, inseparable from the mould and impositions of the Treaties, the political and ideological nature of the forces that negotiated the Agreement, and the long process of interference and blackmail at the origin of its shortcomings, weaknesses and constraints, and which do not answer the legitimate aspirations and interests of the British people, but rather try impose solutions that keep that country bound by European Union policies.

However, and despite the profound contradictions that have arisen and that continue to mark the social and political situation in the United Kingdom – many of which are the result of pressure and interference from the European Union – PCP underlines that the decision of the British people now realized constitutes a victory over fear, submission and catastrophism, thus representing an additional element in the struggle for another Europe of workers and peoples.

PCP salutes and expresses its solidarity with the communists and other British progressive forces who have never given up affirming and defending an alternative progressive project for the UK to leave the EU and who, in this new framework, defend the rights and aspirations of British workers and people and fight, like PCP, for an alternative framework of relationship between sovereign states in Europe, respecting the sovereignty and rights of peoples.

PCP reaffirms its commitment to fight against all attempts and manoeuvres that, under the pretext of a “reinforced Union of 27” and the supposed consequences of the UK's withdrawal, seek new attacks on workers' rights and the sovereignty of States, the deepening of the neoliberal and militaristic pillars of the European Union, and an even greater asymmetry and concentration of power in the supranational sphere and in the Franco-German axis.

PCP affirms its intention to continue to closely monitor all issues related to the rights of the Portuguese to work and reside in the United Kingdom, and reiterates that the Portuguese Government must resolutely intervene, with the authorities of the United Kingdom and the European Union, to ensure the defense of their legitimate rights – among which, the right of residence, the right to equal treatment, the right of access to public health care and education services, the right to social security benefits, the right to family reunification, the mutual recognition of academic qualifications and professional qualifications.

PCP considers that the Portuguese Government should take the necessary initiatives to ensure the development of mutually advantageous bilateral relations between Portugal and the United Kingdom, within the framework of respect for the sovereignty and equal rights of each country and the rights and aspirations of the Portuguese and British people. Therefore, PCP considers that the defense of the interests of the Portuguese people, and of the Portuguese community in the United Kingdom, should not be constrained or jeopardized by any impositions or conditions from the European Union, namely in the context of a future relationship between the United Kingdom and the European Union.

#UnitedKingdom #Europe #PeoplesStruggles #EuropeanUnion

The RMT, which has more than 80,000 members in many sectors of the transport industry, has long held a position against the European Union, and in the recent referendum they campaigned to leave the E.U. Rather than using the term ‘Brexit’, they used the term ‘Lexit’, meaning they advocated leaving the E.U. for left wing reasons, not the right wing reasons that were raised by some leaders of the Brexit campaign.

Hoyle explains their position in this interview.

If the subtitles don't appear by default, click ‘CC’ on the YouTube video for subtitles.

#DurbanSouthAfrica #Durban #EuropeanUnion #Brexit #Lexit

The result of Britain's referendum demonstrates the increasing discontent of the working class and popular forces towards the EU and its anti-people policies. However these forces must disentangle themselves from the choices of sections and political forces of the bourgeoisie and acquire radical and anti-capitalist characteristics. The result records the dissipation of the expectations, which had been fostered by all the bourgeois parties-in Greece as well-together with the EU's mechanisms that the peoples could allegedly be prosperous inside the framework of the EU.

The fact that the issue of the departure of a country from the EU was posed so intensely- and indeed a country the size of Britain-is due on the one hand to the internal contradictions in the EU and the unevenness of its economies and on the other to the confrontation taking place amongst the imperialist centres, which sharpened in the conditions of the economic recession. These factors reinforce the so-called euroscepticism, break way trends, but also trends that seek a change in the form of political management of the EU and Eurozone.

Vehicles of reactionary “Euroscepticism” are nationalist, racist and fascist parties, like the UK Independence Party of Farage (UKIP), the National Front of Lepen in France, the “Alternative for Germany” and similar formations in Austria, Hungary and in Greece, e.g. fascist Golden Dawn, National Unity of Karatzαferis and others. But “Euroscepticism” is also expressed by parties that use a leftwing label, criticize or reject the EU and Euro, support a national currency and seek other imperialist alliances, with a strategy that operates within the framework of capitalism.

These contradictions and antagonisms permeate the bourgeois classes of every EU member-state. The economic and political processes underway, both in G. Britain and in the EU, the negotiations concerning the position of the British bourgeoisie the day after, can lead to new temporary agreements between the EU and Britain. What is certain is that as long as capitalist ownership of the means of production and bourgeois power remain in place, the developments will be accompanied by new painful sacrifices for the working class and popular forces.

The result of Britain's referendum exposes the other political forces in Greece, which glorified Greece's participation in the EU during all the previous years, presenting it as an irreversible process or sowing illusions about the need for even “more Europe of democracy and justice» It also exposes those forces that consider a national currency as being a panacea that will lead to the people's prosperity. Britain with its Pound Sterling took the same anti-worker and anti-people measures as the other countries that are in the Eurozone. It will continue to take the same measures outside the EU as well, as this is imposed by the need for its monopolies to be competitive and profitable.

It is certain that over the next few days the voices and “tears” will multiply, both on the part of the SYRIZA-ANEL government and on the part of the other bourgeois parties about the “need to reestablish the EU”, about the “EU that lost its way and needs to return to its roots” etc. However the EU since its creation has been and is a reactionary alliance of the bourgeois classes of capitalist Europe, with the aim of bleeding the workers dry and robbing other peoples of the world, in the framework of their competition with other imperialist centres. It was not and will not be a permanent arrangement, just as similar alliances in the past were not permanent. Capitalist unevenness and competition, the change in the correlation of forces sooner or later will bring contradictions to the surface, which will no longer be able to be bridged by temporary and fragile compromises. Simultaneously, new phenomena, processes for new reactionary alliances will be come to fruition on the terrain of capitalism.

The interests of the Greek people, the British people, of all the peoples of Europe must not be placed under a “false flag. They must not be placed under the flags of the bourgeoisie and its various sections, which determine their choices and international alliances according to their interests and on the basis of the greatest possible exploitation of the workers. The necessary condemnation of capital's predatory alliance, the EU, the struggle for the disengagement of every country, to be effective, must be connected to the necessary overthrow of capital's power by workers'-people's power. The social alliance of the working class and the other popular strata, the regroupment and strengthening of the international communist movement are preconditions to pave the way for this prospect of hope.

STATEMENT OF THE PRESS OFFICE OF THE CC OF THE KKE

#Greece #EuropeanUnion #KKE #Brexit

Washington, D.C. – In a bold and historic move, British voters decided to leave the European Union (EU) on Thursday. In a 52% leave to 48% remain vote, the British people have struck a blow against the EU’s regime of austerity. June 23, the date of the British vote to exit the European Union (EU), will go down as the day that British workers turned their back on the anti-democratic and anti-worker EU.

The media have mostly trumped up the negative forces within the camp of leave voters, while ignoring the legitimate grievances of average British workers. The media is aware, however, of the historic nature of this vote. CNN called it “the single most momentous day in British politics since World War II.” The momentous nature of the vote is only reinforced by the fact that at its core the decision to leave represents working class people in a powerful (former) EU state successfully standing up against the imperialist machinations of predatory and foreign finance capital.

The decision to leave the EU is not without its contradictions. Unfortunately, not a few supporters of the decision to exit the EU were motivated by xenophobic and anti-immigrant racism. These forces are what the media chooses to focus on.

Resistance to austerity, bolstered by inter-imperialist rivalry, drove the British vote to exit the EU. These same trends may well be what undoes the EU if the British vote compels a wave of intensified worker resistance in other EU countries.

Economic stagnation and austerity drive British working class to resist EU rule

The EU’s program of austerity has driven British workers to exit the EU. European Union-administered austerity is more than just a set of temporary measures in response to the 2007-08 global financial crisis. Austerity is the long-term budget policy of the EU and is mandated on member states by the terms of the Maastricht Treaty. This permanent austerity policy exacerbated the 2007-08 global financial crisis, but is not purely a response to it.

According to The European Institute, a Washington DC-based policy group focused on transatlantic affairs, Maastricht criteria prohibit EU member-state budget deficits in excess of 3% of their Gross Domestic Product (GDP) or a national debt that exceeds 60% of the GDP. Member states are allowed to exceed these limits only in exceptional circumstances and for limited periods of time.

The Maastricht Treaty outlines three successive stages to economic and monetary union within the EU. The first two stages require the liberalization of the movement of capital and the convergence of member states’ economic policies. Britain was actually exempt from the third stage, which requires participation in a single currency, and the country has always used the pound sterling as its currency, not the euro, as a result.

The pressure to stay within the debt and deficit limits of the Maastricht Treaty created extreme budgetary pressure to cut services. This is true even in Britain, a country that was actually exempt from the fines and sanctions that usually accompany a member state’s violation of the debt and deficit ceiling. According to a 2015 Telegraph article, Britain had violated the EU’s fiscal rules as early as 2008 but was given time to reduce its spending as a result of the global financial crisis. In 2014, Britain’s budget deficit still exceeded 5% of its GDP, and the EU extended its surveillance of that country’s budget.

According to data from the New York Times and The European Institute, the British government had unveiled the country’s most severe public spending cuts in 60 years in 2010. Average government department costs were reduced by 19%, long-term unemployment benefits were sharply curtailed, and a decision was made to gradually raise the retirement age. In the process 490,000 public jobs were slated for elimination. All of this was part of a $130 billion (£83 billion) budget cut aimed at reducing Britain’s budget deficit, which then rested at 11.5% of GDP, down to 1% of GDP over the next five years.

This same scenario has played out to varying degrees in countries all across Europe. Spain reduced wages for public employees by 5%, eliminated 13,000 public jobs, suspended automatic inflation adjustments for pensions, and cut new child subsidies and regional funding in an attempt to reduce its budget from 11.2% of GDP in 2009 to 6% in 2011. When Lithuania implemented austerity measures to reduce its budget deficit, the measures included a two-year freeze in public sector salaries, public sector pension cuts of 11%, increased taxes on medicines and a decrease in parental leave benefits.

No country has suffered more under the EU’s austerity policies than Greece, where attempts to reduce the budget deficit cut public sector wages by more than 25%, cut workers’ bonuses, eliminated temporary workers’ jobs and significantly raised the retirement age. The International Business Times recently reported that the average monthly pension in Greece declined 38%, from $1484 a month in 2009 to $915 a month in 2015. The Greek crisis is exacerbated by the actions of German finance capital and the International Monetary Fund, which have been ruthless in imposing ever-increasing austerity on the Greek government as it struggles to pay back loans to private German, French and Greek banks.

This is just a snapshot of the austerity British workers see in their own country and in most countries across the EU. This is the austerity that British workers are fighting against as they free themselves from the EU’s punitive fiscal policies. The austerity and economic weakness of the EU drove the successful push by British workers to exit the EU and looks poised to drive resistance to the EU’s regime by workers in other countries in the future.

Inter-imperialist rivalry undermines European Union stability

The decision to leave the EU is not without its contradictions. While worker resistance to austerity is one factor in the decision to leave, the interests of British imperialism is another. In 1915, the Marxist theoretician, Russian revolutionary and future leader of the Soviet Union Vladimir Lenin penned an article titled “On the Slogan for a United States of Europe.” In it, he discussed the important question of the economic content and significance of a trans-European project on this level. Lenin wrote, “From the standpoint of the economic conditions of imperialism, i.e., the export of capital arid the division of the world by “advanced” and “civilized” colonial powers—a Unites States of Europe, under capitalism, is either impossible or reactionary.”

Lenin speculated that the inter-imperialist rivalries of the great powers of Europe at that time – Britain, France, Russia and Germany – would make progressive integration impossible and any sort of integration challenging. At the same time, he acknowledged that a United States of Europe was possible as a temporary agreement between European capitalists for the purposes of jointly suppressing socialist movements in Europe and protecting their imperialist interests against the United States and Japan.

The content of the European Union and the multiple forms of resistance to it reinforce Lenin’s view on the subject some 100 years after it was first articulated. Britain’s historic decision to exit from the EU, and the underlying causes driving it, demonstrate Lenin’s thesis that a United State of Europe, even in an undeveloped embryonic form known as the European Union, is certainly reactionary and may well be impossible as a sustainable project. Three of the four great imperialist powers mentioned by Lenin are major players in the EU. Only Russia is not in the EU.

From the perspective of many British capitalists, the interests of British imperialism rest more with the U.S. than with France and Germany, which dominate the EU in many ways. Britain and the U.S. are linked together through a “special relationship” rooted in a strong transatlantic military alliance and the substantial interpenetration of capital and reinforced by a long and storied shared political history. The Financial Times estimates in 2016 that U.S. companies are the biggest inward investors in Britain, having invested a total of $558 billion. According to this estimate, 7500 U.S. companies employ 1.2 million people, making the U.S. one of Britain’s biggest employers.

The Organization for International Investment projects that the United Kingdom is the single largest foreign investor in the U.S. with $449 billion in cumulative investments through 2014. This represents 15% of all cumulative foreign direct investment holdings in the U.S. According to figures from the Confederation of British Industry, British companies employed 943,500 U.S. workers. More than one in four jobs at British-supported companies are in manufacturing. Finance and insurance, information, and retail trade are the next largest industries with approximately 7% each of the jobs at British supported companies.

Viewed from this perspective, many British capitalists believe they have more to gain through an alliance with the U.S. to protect their interests against French and German capital than the other way around. The strong military alliance between Britain and the U.S. only reinforces this view. In 2012, U.S. President Barack Obama called the alliance between Britain and the U.S. “one of the greatest alliances the world has ever known,” according to the Guardian. Obama went on to list the ways in which this military alliance has advanced both U.S. and British imperialism through the anti-Soviet Cold War and the wars and interventions in the Korean peninsula and Afghanistan.

Contradictions between British labor and capital drive competing visions of EU exit

Pro-business nationalists and progressive worker forces have competing diagnoses of the problem and visions for a future outside the EU. Typically, the media have chosen to latch onto the reactionary drive to leave the EU in their reporting, not the progressive drive. The truth is complicated as contradictions between British labor and capital expose sharply different visions of an EU exit.

On the one hand, a substantial minority of British capitalists support Britain’s exit from the EU. According to reporting in the Telegraph, British Chambers of Commerce polling show that 37% of business leaders support leaving the EU, up from 30% last year, and 42% of small businesses employing fewer than ten people support the decision to leave the EU. 47% of National Federation of Builders members support exiting the EU. Pro-leave capitalists and their prominent political supporters intentionally stoke the flames of xenophobia in order to gain the support of conservative voters who hew to an anti-immigrant, British nationalist line.

The voices of this section of capitalists and British nationalists, which include the likes of far-right UK Independence Party leader Nigel Farage, have unfortunately dominated the media attention and tend to frame the exit as a Brexit (British Exit) that puts Britain’s national interests above “burdensome” EU economic regulations and liberal internal migration rules. Racism, national chauvinism, and conservative economic ideology motivate this section of the leave camp. These forces may dominate the media coverage, but they have a faulty diagnosis of what ails the European Union and an often-times dangerous vision of the path Britain should take upon leaving.

On the other hand, there are a large number of left voices that support leaving the EU. Left forces that supported the exit from the EU along progressive lines include the Communist Party of Britain, Communist Party of Britain (Marxist-Leninist), Communist Party of Great Britain (Marxist-Leninist), the RMT rail union, Trade Unionists Against the EU, Indian Workers Association (GB), Bangladeshi Workers Council of Britain, and more.

These forces are battling imperialism on two fronts. They oppose the machinations of other European imperialists, namely France and Germany, by leaving the EU even as they battle their own country’s capitalists in Britain, which is also an imperialist country. Progressive British forces have won this most recent battle against monopoly capitalism.

Now that the vote to leave the EU has succeeded, these same progressive forces will likely turn their struggle to clearly frame the debate and drive a campaign that forces British capitalists to rescind anti-worker policies. Instead of attacks on immigration, which may have some rise in the interim if the decision to exit the EU is accompanied with short-term economic disruption, an anti-austerity battle that takes on shortages in housing, declining wages and the deterioration of public services is the key to building a progressive future for a Britain free of the EU.

#WashingtonDC #EuropeanUnion #Brexit

In February, reactionary mobs with fascist gangs in the lead managed to bring down the democratically-elected government of President Viktor Yanukovych. This was the culmination of a process promoted by the U.S. and countries of the European Union to bring instability and turmoil to the Ukraine. The U.S. alone spent about $5 billion on the project. The result was there for all of us to see on TV: neo-Nazis trying to destroy monuments to the heroes of World War II and the socialist past and seizing government buildings.

To say that the movement that ousted President Yanukovych was something progressive or democratic is to confuse right and wrong. Certainly there were legitimate reasons to be dissatisfied with Yanukovych and his oligarch associates, but that does not change the reactionary nature of the anti-government turmoil.

It is a fact that the leading forces in this right-wing movement, such as Right Sector and Svoboda, have their roots in the most disgusting of Ukraine’s political currents. They see themselves as the political heirs of the Nazi collaborator Stepan Bandera, an anti-communist, anti-Semitic butcher who first did Hitler’s bidding and then went on to be a servant of the CIA. Look at the photos of the turmoil in Keiv and other Ukrainian cities; the portrait of Stepan Bandera shows up again and again. In the Ukraine, the White House and its EU allies are supporting ugly nationalists, who preach hatred against other nationalities, especially Russians, and who will carry out the most reactionary of agendas if they are successful in consolidating power.

Given this reality it is not surprising that the people of Crimea, who are mainly ethnic Russians, voted overwhelmingly to rejoin Russia. They did not want to live under the monsters who roam the halls of government in Kiev. They understand what these vicious chauvinists are all about. After all, one of the first measures passed by Ukraine’s new regime was abolishing the equality of languages.

It is also understandable and just that people in the eastern Ukraine are rising up and attempting to take things in their own hands. They are standing up to fascists and a U.S./EU power grab.

The Ukraine is an important prize for the Western imperialist powers, who covet its natural resources and industries and plan to make use of its strategic location. Their goal is the complete encirclement of Russia. Western powers have prepared a large loan from the International Monetary Fund, and in return, the Kiev authorities are preparing austerity measures that will further impoverish the people, starting with a 50% rise in the price of gasoline on May 1.

Since the fall of the Soviet Union, the U.S. has systematically expanded its aggressive military alliance, NATO, throughout Eastern Europe and the Baltic states. It has reached the point where Russia is close to being surrounded. Russia’s elite and their political representative Vladimir Putin want to expand their sphere of influence and control. As a result they find themselves being drawn into a conflict with the Western imperial powers.

The U.S. government has no right to complain about the actions of Russia. Its moral authority is less than zero. The U.S. invaded and occupied Iraq and Afghanistan. Along with NATO, it destroyed Libya. It is trying to subjugate Syria and finances the Israeli occupation of Palestine. The list of current U.S. wars and interventions is much longer, but the point is clear enough: Washington DC is the capitol of an empire and those that speak for it are hypocrites and liars.

All progressive people should oppose sanctions on Russia. We have seen this before. Sanctions are a step towards war. Likewise, we need to be clear about how we assess events in the Ukraine. A victory for fascists and their Western backers would be a setback for people everywhere.

Here in the U.S. we are under attack by a system that takes away our jobs, exploits us when we work and thrives on inequality and oppression. Our enemy is right here at home.

End U.S./European Union Intervention in the Ukraine! Stop U.S. Funding for Ukrainian Fascists! No Sanctions on Russia!

#UnitedStates #Russia #antiwar #Ukraine #USImperialism #EuropeanUnion #antifascism #Svoboda #Crimea

The progressive Lebanese political party Hezbollah sharply condemned a decision by the European Union to put a ‘terrorist’ label on its military wing, June 22.

“It looks as if the decision was written by American hands with Zionist ink and the EU had only to put its seal for approval,” Hezbollah’s statement said.

Hezbollah has worked hard to overcome sectarian divisions in Lebanon and across the Middle East. It is working with an array of nationalist, communist and religious organizations, as well as countries like Syria and Iran, to build a camp of resistance to imperialism and Zionism.

#Lebanon #Iran #Zionism #Syria #antiimperialism #EuropeanUnion #Hezbollah #MiddleEast

San José, CA – On June 9, Spain and the European Union made an agreement to bail out Spain’s troubled banking sector. This agreement means Spain is the fourth country (along with Portugal, Ireland and Greece) in the eurozone to have to take a bailout.

The agreement will provide up to 100 billion euros ($125 billion) in loans to Spain’s bank bail-out fund, the FROB (Fund for Orderly Bank Restructuring). The agreement with the European Union was triggered by Spain’s third largest bank, Bankia SA, which needed a 19 billion Euro ($24 billion) bailout. But the FROB had only 9 billion euros, after three earlier rounds of bailouts of Spanish banks. The Spanish government, which would normally sell bonds to borrow money to bail out banks, was having a harder and harder time selling its own bonds.

Spain’s banks have billions of euros of bad real estate loans because of the boom and bust in the Spanish housing market. Spain’s housing boom was almost twice as large as the one in the United States, with construction spending accounting for about 10% of Spain’s Gross Domestic Product (GDP, the total spending on goods and service made in Spain), vs. 6% in the U.S.

Here in the U.S., big businesses have been able to bounce back from the financial crisis caused by the boom and bust in U.S. housing. This was aided by the U.S. central bank, the Federal Reserve, which printed some $2 trillion in money to buy financial assets, while the U.S. government spent another $800 billion on a bank bailout.

But Spain does not have the power to print money since it adopted the euro; rather this power lies with the European Central Bank or ECB. Spain’s government is also limited in its ability to borrow and spend money since its government bonds are not backed by the ECB.

As a result, while unemployment in the U.S. peaked at 10% and has since dropped to almost 8%, the unemployment rate in Spain has increased to almost 25% and is still rising. Over half the young people in Spain do not have jobs.

Spain actually had a small federal government budget surplus during its housing boom (with tax revenues greater than spending by 0.3% of GDP from 2000-2007). However the government budget deficit swelled to 12% of Spanish GDP in the aftermath of the 2008 financial crisis and deep recession in Europe that went hand-in-hand with Spain’s housing bust.

The Spanish government, first led by the social-democratic Spanish Socialist Workers Party (PSOE), and now by the conservative People’s Party, has instituted deep spending cuts and tax increases that have reduced the budget deficit from 12% to 9% of Spanish GDP. But this austerity has also led Spain into another deep recession, even before it had recovered from the 2008-2009 economic downturn.

These back-to-back recessions have dragged down the Spanish housing market, leading to even more losses at Spanish banks, which made a lot of loans during the boom times. Then in December of 2011, and again in February of this year, the European Central Bank made one trillion Euros (about $1.3 trillion) of long-term (three year) loans to Spanish and other European banks. But Spanish banks have already burned through almost all of this money in order to pay depositors withdrawing their money, and the rest, almost 40%, going to buy Spanish government bonds.

As the Spanish government had a harder time borrowing, the price of Spanish government bonds fell, causing even more losses among Spanish banks. Thus there is a need for another round of bank bailouts, to be paid for by the 100 billion euro E.U. loan.

While the bailout does put off an immediate Spanish banking crisis, it adds more European supervision to Spanish banks. This could worsen the Spanish depression if Spanish banks are forced to limit loans or even shut down to make the remaining banks more profitable. Spain’s unemployment rate is already close to 25%, the highest in the Euro-zone, and even higher than Greece’s unemployment rate. Industrial production (the goods produced by factories, mines, and refineries) in Spain has fallen 8.3% over the past year.

While the Spanish bailout does not have the severe austerity measures of tax increases and government spending cuts that have been imposed on the Greek, Irish and Portuguese people, it will make it harder for the Spanish government to borrow in the future. The EU bailout loan will be ‘senior’ to other Spanish government debts, meaning that the EU must be paid back before other owners of Spanish government bonds. This will make it harder for the Spanish government to sell bonds in the future.

On June 11, prices for Spanish bonds fell and their interest rate rose to more than 6.4% on a ten-year bond (in contrast, U.S. government ten-year bonds had an interest rate of only 1.6% on June 11). This increases the odds that the Spanish government itself may need a bailout or end up being forced out of the eurozone.

#SanJoséCA #Unemployment #Depression #Europe #capitalistCrisis #bankBailout #EuropeanUnion #Spain

The Greek predicament exposes root problems of capitalism. Production is a highly organized process. It embraces the whole of society. Yet the means of production are privately owned. The aim is profit. There is no overall plan of development. Production leaps ahead here and falls apart there; it is uneven. The outcome is frequent crisis. The Greeks have a word for it – chaos.

The European Union is really no more than a zone with a common currency, the euro. The main motive for the euro zone, which was set up among 11 countries in 1999, was to allow advantages to Germany and France in export trade. Highly developed Germany saw its exports zoom from $610 billion in 1999 to $1,498 billion in 2008. In that year Germany was the world’s largest exporter, according to the CIA’s World Factbook.

Growth of GDP, adjusted for inflation, was much less impressive. It averaged less than 2% per year over the same period. The economy of France followed a similar pattern. The problem is characteristic of monopoly capitalism. Industry is highly developed yet vast numbers of people are deprived of the benefits due to the demands of profit. Hence consumer demand lags behind. It becomes hard to expand production despite large profits from export sales. Large amounts of capital are exported in the attempt to deal with the problem.

A lot of exported capital ended up in Greece through purchase of government bonds. Government debt for Greece ran around 100% of gross domestic product from 1999 through 2007. The euro zone average in the same period was much lower, around 65-70% of GDP. A significant amount of the bond money went to a large government employment sector, around one fifth of total Greek employment, and other human needs.

It worked well enough for a while. Still the downside of the euro zone all along is that it worsens the conditions of uneven development. Other small countries suffered problems like real estate bubbles. Even medium-size countries, including Spain and Italy, face difficulties.

The media call Greece “indulgent” because of its debt. It is blamed for “failure to reform labor markets to be more competitive with Germany,” and nonsense like that. Again, the Greek have a word for it – hypocrisy.

The U.S. financial collapse of 2008 hit the euro zone hard, and threw it into crisis. The shrinkage of the Greece economy led to even more borrowing but with less means to repay. Government debt zoomed to [142.8% of GDP as of 2010](https://secure.wikimedia.org/wikipedia/en/wiki/File:Greece_public_debt_1999-2010.svg). At this point there is considerable danger that Greece will default on its debt payments.

A Greek default would have a falling-dominoes effect. Finance in all developed capitalist countries has become an affair of buying and selling financial properties at a frantic pace, accompanied by equally frantic borrowing and lending to keep all the bets covered.

Take Societe Generale, a big French bank, for instance. It is heavily exposed to Greek debt. Default would mean Societe Generale comes up short on expected returns from Greek bonds. It would then face defaults to its own creditors. In turn the SG creditors would face problems with their creditors, and so on.

Financial markets have been fragile for decades. The present is not good times. U.S. and E.U. finances are tightly interwoven. A big euro zone crisis would spread to the U.S. financial system, just as the 2008 U.S. crisis spread to Europe.

The European Central Bank, the Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank are cooperating to resolve short-range problems. A euro zone plan to set up a 440 billion euro bailout fund ($611 billion) was set up in July but must be ratified by 17 member countries to take effect. There are no guarantees any of it will work. Robert Zoellick, head of the World Bank, had to ‘fess up’: “It is not responsible for the euro zone to pledge fealty to a monetary union without facing up to either a fiscal union that would make monetary union workable or accepting the consequences for uncompetitive, debt-burdened members.”

The euro zone problems reveal that it is impossible under capitalism to eliminate uneven development. Some have, some don't, and those that have cannot split the difference.

The Greek people have been struck by a savage austerity policy of higher taxes along with losses in employment, services and pensions. The money taken from the people will go toward the bonds – but even then it will not end the crisis.

The Greek people aren’t having it. Huge protests have rocked the country for months. Let the capitalists beware. The people will never agree to be the fall guys for the contradictions of capitalism. The deeper the crisis becomes the more they will fight back.

#Greece #CapitalismAndEconomy #GreekDebtCrisis #EuropeanUnion